Energy bosses face 'criminal sanctions' for fixing prices

Energy company executives who manipulate markets to overcharge customers could
face “criminal sanctions” and even be jailed, ministers have signalled

Ed Davey, the Energy Secretary, told MPs he was looking at bringing rules for the energy industry into line with the banking sector, where misconduct can end in a jail term.

Mr Davey made the announcement as he outlined the Government’s latest package of measures aimed at curbing rising energy prices.

The Coalition’s annual Energy Statement said the criminal rules for the energy sector are now under consideration.

“The Government wants to see strong sanctions against those who manipulate energy markets and will consult on criminal penalties, such as those already in place in financial markets, for such actions,” the report said.

Several of Britain’s biggest energy firms have recently raised prices by more than 8 per cent, and average bills are now heading towards £1,500 for the first time.

The companies say that they have to increase prices because of rising wholesale costs for energy, and because of Government environmental levies.

Critics of the industry say its finances are opaque, concealing the companies’ true profit margins.

Debating the energy report in the House of Commons, several MPs accused the “Big Six” energy firms of acting as a cartel, colluding to raise their prices and exploit their dominance in the market.

The companies deny any such collusion and have challenged politicians to provide evidence to support their accusations.

Mr Davey said the companies will now face new scrutiny from OFGEM and other regulators to examine whether they are behaving in a truly competitive manner.

He said: “Energy companies need to know that any wrongdoing will be uncovered and dealt with. That’s why the regulators are going to carry out annual competition reviews, to make sure the energy market is operating properly.

The Government plans mean “tougher penalties for market manipulation and putting an end to opaque finances,” he said.

Mr Davey also said that the industry must make it easier and quicker for consumers to switch suppliers.

Households should be able to switch in 24 hours, rather than the current five weeks, he said.